Are You a Deadbeat??: Secret History of the Credit Card on PBS Frontline last night?

[chrissyk]

Boston Legal did a great episode about this last week. The CC industry considers people like me "deadbeats" because we pay off our balances in full, thus denying them obscene interest profits. They make money off every transaction, but that isn't enough for them.

Just about everyone I know has a horror story.

Not only are DH and I "deadbeats" then, but I am spawned from an entire family of deadbeats

 

[mjh8955]

Amazing to me how many people have absolutely no idea how long it would take to pay off one of their credit card bills at any given time by making minimum payments only, and that's if they quit charging. The panel of people that were interviewed all had money in their bank accounts but chose instead to carry a balance on their credit cards. They didn't seem to comprehend how much money they were throwing away on interest.

And I find it frightening that the OCC, along with the credit card head honchos seem to be so motivated by greed and continue to get rich off of these shady practices.

What disturbs me most of all is that so many consumers buy things on credit that they can easily live without, but t.v. and peer pressure convinces them otherwise.

We have never carried a balance on a credit card in 20 years of marriage. We are one of the few, the brave, the proud, who happily live within our means. And our parents and grandparents were the same before us. I hope our children follow in our footsteps.

 

[MrsPete]

Boston Legal did a great episode about this last week. The CC industry considers people like me "deadbeats" because we pay off our balances in full, thus denying them obscene interest profits. They make money off every transaction, but that isn't enough for them.

Just about everyone I know has a horror story.

I've never been proud to be called a deadbeat before now!

 

[MrsPete]

By their lingo we've always been "deadbeats". Funny, I thought the opposite: deadbeats never paid their bills. Interesting and rather sick.

Ah, by paying YOUR bills ontime, you are failing to give them interest, with which they can pay THEIR bills! You're right though: sick.

 

[summerrluvv]

I think that the CC industry hates people like me who realized that they needed to get their credit cards in order - we paid them all off and just have one now for emergencies. I can't tell you how many "new offers" I get in the mail daily.... its no wonder that people get out of control. I got my first card in college and quickly charged it to the limit - didn't think about anything except how cool it was to pay for drinks or buy junk - until the bill came in and I had to start "paying" for it all.

Thanks for posting this!

You should opt out if you keep receiving offers you don't want.

https://www.optoutprescreen.com/?rf=t

 

[ButterflyJen]

As soon as DH's credit card is paid off, I aspire to be a deadbeat for the rest of my life. (Actually, I aspire to never having to use the CC again!)

 

[disneysteve]

You should opt out if you keep receiving offers you don't want.

I did this a long time ago and still continue to receive at least 4-5 offers per week.
I just did it again (permanent option, just like last time). Maybe that will help.

 

[disneysteve]

The panel of people that were interviewed all had money in their bank accounts but chose instead to carry a balance on their credit cards. They didn't seem to comprehend how much money they were throwing away on interest.

ABC did a special on this a couple of years ago, on Primetime I think, and the exact same thing happened. They had a panel of regular folks who have credit card debt. Several of them readily admitted that they had more than enough money in the bank to pay off their debt but for some twisted reason preferred to keep paying 18% interest on the CC while earning 1 or 2% interest in the bank. It is things like this that make it clear why financial management needs to be part of school curriculums.

A few weeks ago, I sat down with DD who is 10. I told her we were going to have "Financial University." She's reasonably savvy already, but I thought it was time to get into more detail. I gave her a hypothetical situation of going to Target and spending $100 and we discussed all the ways we could pay - cash, check, debit card, credit card - and discussed how each worked and the pros and cons of each.

Of course, the bulk of the lesson was on credit cards. We sat at the computer and used a calculator at bankrate.com to show how long it would take to repay debt making just the minimum payments. I used our most recent CC bill as an example. When she saw that making the min. payment on that bill would take us 33 years to pay it off, and I told her that millions of people do just that, her response was, "People are really stupid!" I was very proud. I think she'll do just fine when she starts getting bombarded with CC offers in a few years.

 

[dcfromva]

I did this a long time ago and still continue to receive at least 4-5 offers per week.
I just did it again (permanent option, just like last time). Maybe that will help.

Disneysteve,
Another source of these offers is your current CC companies. I found that all the offers disappeared when I also notified the companies with whom I do business that I did not wish to receive anymore unsolicited CC offers. (I also told them not to send anymore of those convenience checks--which they were sending on a regular basis and also with the CC statement. Just one more thing that I would have to run through the shredder. )

-DC

 

[mickeyfan2]

I'm a deadbeat and proud of it! I pay the CC bills in full every month and on time. Never late. Never any interest or penalty charges. They must hate me. Though they do give me lots and lots of reward points

Me too. I am proud to be a member of the deadbeat club.

 

[Lulu's Mom]

but I did not know that when you pay off your balance... if you had a revolving balance... that you will receive another bill of just interest. I was so outraged, I know it is my own fault for not knowing this, but once you think you have paid your last bill, you get one more that is just money for the CC company. I hate credit cards and I learned my leason the very hard way. I was never taught to be wise with money or to save money. My DM has filed bancrupcy twice and has just horrible financial issues... and sadly I learned from her.

I can say now that we are shaping up and a lot of it has to do with me now being envious of those people who have money saved and pay for things with their bank cards instead of credit cards, instead of being envious of those that have every material possescians but no savings or money period. We are on the path to being free of our debt very shortly and we work off of a budget now and we stay within our means.

One thing that I have learned form my DM is to teach my DC about money and about how impartant it is to save for emercencies and the future.

 

[disneysteve]

I found that all the offers disappeared when I also notified the companies with whom I do business that I did not wish to receive anymore unsolicited CC offers. (I also told them not to send anymore of those convenience checks--which they were sending on a regular basis and also with the CC statement. Just one more thing that I would have to run through the shredder.

I'll have to do that too. I did stop the checks a while ago. Just a pain that we have to do this.

 

[Chicago526]

I'm working on being a deadbeat!!! Hope to be there in 1 to 2 years! DH isn't helping, he keeps coming up with household remodeling projects he wants to do but I'm determined to do it!

 

[disneysteve]

I can say now that we are shaping up and a lot of it has to do with me now being envious of those people who have money saved and pay for things with their bank cards instead of credit cards, instead of being envious of those that have every material possescians but no savings or money period.

What a great statement. Congratulations! A lot of folks can take a lesson from this.

 

[Free4Life11]

You should opt out if you keep receiving offers you don't want.

https://www.optoutprescreen.com/?rf=t

This was the best thing I ever did! I did get one the other day...I'm convinced the University sells their mailing list, beacuse I've NEVER used my offiicial address or anything.

 

[C.Ann]

That's interesting.. If you pay off your balance in full each month you're referred to as a "dead beat".. Don't be surprised if somewhere down the road they start charging you some sort of "fee" for not carrying a balance.. After all, they are in business to make money via the interest..

 

[Jen D]

but I did not know that when you pay off your balance... if you had a revolving balance... that you will receive another bill of just interest. I was so outraged, I know it is my own fault for not knowing this, but once you think you have paid your last bill, you get one more that is just money for the CC company.

Yeah, isn't it a stinker? I paid off a bunch of balances this past year that had been revolving and you feel so good paying that final bill, ahhh, it's paid off, and then you get one more bill of interest after that. D'oh!

I was a revolver... now I'm a gamer, future deadbeat. I have no debt left bearing any interest. I have a modest amount left on a 0% interest card that will be paid off in the next couple of months, and then I'm done.

"Smart Money" this month had a piece, 10 Things your Credit Card Company Won't Tell You. Most I'd read about here and were probably also in the PBS special but one made me think... about how one bad debt with someone else can jack up your interest rate, even if the debt is incorrect, like a disputed medical debt. I actually have a small disputed amount with the hospital I delivered my son at almost 2 years ago. They keep erroneously billing me for this amount, I've fought with them and their independent collector, and right now I've fired the most recent shot, they've been quiet. It's actually been a few months so I was sort of assuming maybe it was over. Now I'm a little nervous. What if this silence means they are getting ready to report it? All my lovingly restored good credit and my 0% balance, poof. I think I'm going to give that agency a call today and check the status.

 

[Free4Life11]

Now see when I get my final interest bill, I think I will send a paper check and write an expletive on the memo line! Or maybe a "Good Riddance to Citibank!"

 

[kfeuer]

That's interesting.. If you pay off your balance in full each month you're referred to as a "dead beat".. Don't be surprised if somewhere down the road they start charging you some sort of "fee" for not carrying a balance.. After all, they are in business to make money via the interest..

They get a fee from the merchants when you use the card, so it's not like they're not making anything (or they couldn't afford to offer all the rewards that they do). If the banks tried to pull that, I'd just switch to cash.

 

[C.Ann]

They get a fee from the merchants when you use the card, so it's not like they're not making anything (or they couldn't afford to offer all the rewards that they do). If the banks tried to pull that, I'd just switch to cash.

--------------------------

True - they get a fee from the merchants, but that's peanuts compared to what they can rack up in interest rates..

Reminds me of the banks that levy a "service fee" for "not" using their various services..

Credit card companies are notorious for doing all sorts of underhanded things.. Just keep your eye on those statements - or switch to cash now and save yourself the aggravation..